TSX, Dow sell off on Obama election win

Investors reacted gloomily today to news of the re-election of U.S. President Barack Obama, maintaining the status quo of a gridlocked U.S. government with the House and Senate divided along partisan lines.

The Dow Jones Industrial Average sold off heavily Wednesday morning, shedding 285 points to trade at 12,959 nearing midday. That’s the Dow Jones’ lowest level since the end of August.

The Toronto Stock Exchange was also lower, with the benchmark S&P/TSX composite index down 124 points to 12,237.

Asia and European stocks took a similar path, with Japan’s benchmark Nikkei losing 10 points to 8,950 and European benchmarks such as Paris’s CAC-40 and London’s FTSE both moved lower.

Francis Lun, managing director of Lyncean Holdings in Hong Kong, said the results mean an extension of the status quo. Stability is normally welcomed by investors, but not when the situation being preserved is an American government paralyzed by infighting over economic issues.